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Commentary

Racing From The Bottom: 75% Of Brands Now Using Programmatic

Not too long ago, one school of
thought questioned whether or not programmatic advertising could truly take hold in the industry, or if the use of the real-time trading tech would simply turn into a “race to the
bottom.”

Today, there are far more optimists than skeptics.

New survey results from Chango, a demand-side platform (DSP), say that 75% of brand marketers are currently using
programmatic. That’s a bit lower than some other reports such as AOL’s study, which found that over 90% of buyers are now using programmatic in some capacity, or the Winterberry Group and IAB study from
November 2013 that said 85% of advertisers and 72% of publishers were using programmatic. Regardless, all of the studies seem to confirm one thing: at least three-fourths of marketers are using
programmatic ad tech to execute buys.

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Chango’s study is also fairly unique in that only brand marketers were surveyed (no agencies or publishers). This is important because it suggests
programmatic is being applied to more than just direct-response campaigns, which is where the tech first found its footing.

The real question, however, is how much money marketers are spending
through programmatic -- and while Chango’s study doesn’t reveal any hard figures, it does find that the majority (74%) intend to increase their programmatic budgets in 2015. Only 9%
of respondents say they have no plans to use programmatic in the future.

"Marketers are passionately embracing programmatic and very bullish on its future," stated Keith Lorizio,
chief revenue officer, Chango. "This commitment is reflected in the significant shift of marketing budgets to support programmatic campaigns over the last 12 months."

Those
shifting budgets include marketers brand new to programmatic too. The study notes that nearly one-third (31%) of brand marketers have been using programmatic for digital advertising for fewer than 12
months. Over half (58%) have been using it for fewer than 24 months.

In addition, Lorizio is not just assuming that marketers are bullish on programmatic’s future; Chango
asked respondents for words to describe their feelings about programmatic’s future, and the top responses were “optimistic,” “exciting,” and “promising.” The
majority (70%) believe most digital buying will be programmatic in the future, while 75% think the tech will be applied to buys outside of display in the “near future,” with 67% predicting
television will be included.

Chango’s study also touches on one of the hottest topics in the programmatic ad industry today: Who is using the tech?

The
majority of respondents (39%) say they completely rely on agencies for programmatic campaigns, but the in-house crowd is not far behind (33%). The rest (28%) are somewhere in between, doing some
programmatic buying and planning in-house while also using agencies.

Chango surveyed 232 brand marketers and interviewed “key stakeholders from Fortune 500 companies”
for the study, the company claims. The report can be downloaded here.

Hardly a surprising result as most advertisers now use the Internet, though mainly for search and promotional functions. It would have been interesting to see what the answers looked like by medium----network TV. spot TV, national cable, TV syndication, consumer magazines, spot radio, etc. I have a feeling that the percentages would be a lot, lot lower for those media.